The main legal point established in the judgment is that the invalidity of an order made under the Customs Act does not automatically render all subsequent proceedings void in law. Additionally, the court emphasized the importance of providing notice and opportunity of hearing in accordance with the principles of natural justice.

Headnote:
Customs Act - Search and Seizure - Sections 110, 111, 112, 119, 124 - The court examined the legality of the search and seizure under the Customs Act, 1962 and the subsequent confiscation of goods and imposition of penalties. The court held that the order made by the Collector without notice and opportunity of hearing was in contravention of the Act and the principles of natural justice. However, the court also ruled that the invalidity of the order did not automatically render all subsequent proceedings void in law. The court further addressed the issue of time limits for issuing show cause notices and the entitlement to the return of seized goods. The court quashed the imposition of penalties and directed the Collector to re-examine and decide the same.
Fact of the Case:

The proper officer authorized by the Customs Act conducted a search and seizure at non-residential and residential premises, seizing 6,000 tolas of gold and other articles. Subsequent proceedings for confiscation and imposition of penalties were initiated against the petitioners.
Finding of the Court:

The court found that the order made by the Collector without notice and opportunity of hearing was in contravention of the Act and the principles of natural justice. However, the court held that the invalidity of the order did not automatically render all subsequent proceedings void in law. The court also addressed the issue of time limits for issuing show cause notices and the entitlement to the return of seized goods. The court quashed the imposition of penalties and directed the Collector to re-examine and decide the same.
Issues: The issues included the legality of the search and seizure, the validity of the order made by the Collector, the time limits for issuing show cause notices, and the entitlement to the return of seized goods.
Ratio Decidendi: The court held that the order made by the Collector without notice and opportunity of hearing was in contravention of the Act and the principles of natural justice. However, the court ruled that the invalidity of the order did not automatically render all subsequent proceedings void in law. The court also addressed the issue of time limits for issuing show cause notices and the entitlement to the return of seized goods. The court quashed the imposition of penalties and directed the Collector to re-examine and decide the same.
Final Decision: The court quashed the imposition of penalties and directed the Collector to re-examine and decide the same. The writ petitions were disposed of with parties directed to bear their own costs.

( 1 ) ON 22-4-1969 the proper officer authorised by the Customs Act, 1962 (Central Act No. 52 of 1962) (hereinafter referred to as the Act) searched non-residential premises bearing No. 86/16 chowdeshwari Temple Street, Bangalore City at which place certain business was carried on under the name and style of "b". Vimal and Co. " While the search and seizure at that place was in progress, the petitioners in Writ Petitions Nos. 4614 and 4615 of 1978 were present and in their presence, the said officer seized a bunch of keys. Accompanied by those persons, the said officer then proceeded to a residential premises bearing No. 13 situated on V Main, 38th Cross, V block, Jayanagar Bangalore-11. On reaching the said place, the said officer in the presence of those persons and the panchas, opened the locks of the said building with the keys of earlier seized by him. After that, the said Officer searched and seized 6,000 tolas of gold kept in a steel almirah found in the said building.

( 2 ) FROM 22-4-1969 and onwards the gold and other articles seized continued to be in possession of the authorities. But, on 3-10-1969 the Collector of Central Excise, Bangalore (hereinafter referred to as the Collector) made and order under the proviso to sub-section (2) of Section 110 of the Act granting extension. The said order that in material reads thus :

"c. No. VIII/10/23/69 Cus. OR/16/69, dated 3-10-1969. ORDER UNDER PROVISO TO sub-S. (2) TO S. 110 OF CUSTOMS ACT, 1962. Whereas 6,000 tolas of gold in 600 pieces of 10 tolas each bearing foreign markings was seized from the premises No. 13, V Main Road, 38th Cross, V Block, Jayanagar, Bangalore-11, by the central Excise Headquarters Staff, Bangalore on the midnight of 22-4-1969, and whereas sufficient cause has been shown to me to the effect that the show cause notice in this case cannot be issued within the period of 6 months of the seizure, I in exercises of the powers conferred on me under proviso to sub-section (2) to Section 110 of Customs Act, 1962, hereby grant extension of time up to 20-4-1970 for issue of show cause notice under Section 124 of Customs Act, 1962. Collector of Customs and Central Excise, Bangalore. "

( 3 ) ON 13-4-1970 the Collector issued show cause notices to the petitioners and others by registered post acknowledgment due proposing to confiscated the seized goods under the Act. But, the said notices issued to the petitioners were not served for one or the other reason and they were actually served on them on 11-6-1970 to which they showed cause. On an examination of the same, the Collector made an order on 20-9-1971 (Exhibit B) and the operative portion of that reads thus : "i accordingly confiscate the said 6,000 tolas of foreign marked gold under Section 111 (d) of customs Act, 1962. I also confiscate the six cotton

jackets and the Chandan Steel Almirah under Section 119 of customs Act, 1962 : i further impose penalties on the following persons as shown below under Section 112 (b) (i) of customs Act, 1962. (1) Shri Jeevaraj Babootmal Jain Rs. 2,00,000 (Rupees Two Lakhs only) (petitioner in W. P. 4614 of 1978 ). (2) Shri Panachand Bikamchand Rathod Rs. 2,00,000 (Rupees Two Lakhs only) (petitioner in w. P. 4615/1978 ). (3) Shri Parasmal Babootmal Jain Rs. 50,000. (Rupees Fifty thousand only) (petitioner in W. P. 4616/1978 ). Against this order, the petitioners filed three separate but identical appeals before the Central board of Excise and Customs, New Delhi - respondent 2 (hereinafter referred to as the Board) with applications for stay. On the applications for stay the Board made conditional orders with which the petitioners did not comply and, therefore, the Board on 30-1-1974 by its separate but identical orders (Exhibits C, D and E) dismissed them without examining the merits. Against the said orders of the Board and the Collector, the petitioners filed three revision petitions before government of India, which by its common order dated 22-8-1977 (Exhibit E) dismis

Click Here to Read the rest of this document

1984 Supreme(Kar) 104

Karnataka High CourtJudges : K.S.PuttaswamyJEEVARAJ - AppellantVersusCOLLECTOR OF CUSTOMS AND CENTRAL EXCISE, BANGALORE - RespondentWrit Petition 4614 To 4616 Of 1978Decided On : 06/14/1984

Karnataka High Court
Judges : K.S.Puttaswamy
JEEVARAJ - Appellant
Versus
COLLECTOR OF CUSTOMS AND CENTRAL EXCISE, BANGALORE - Respondent
Writ Petition 4614 To 4616 Of 1978
Decided On : 06/14/1984